Whether Should the Owner Be Liable for Taylors Losses - Essay Example

Name: Course: Instructor: Date: 3. Taylor v Caldwell has introduced enormous confusion into the understanding of the nature of contractual liability. Discuss. Introduction: Taylor rented the music hall for a concert. In between the date of performance and the contracting date, the structure was destroyed by fire. Because it was not possible to stage the concert in the building, Taylor sued for damages for the expenditures he had incurred in advertising the concert and preparing for the concert. Whether should the owner be liable for Taylor’s losses? Discussion: In the Taylor v Caldwell case the plaintiffs and defendants formed a contract in which the defendants agreed to permit the plaintiffs to use The Surrey Gardens and Music Hall on four days (17th June , 15th July, 5th August and 19th August), to stage a number of grand concerts in the building. The plaintiff on his part had to compensate the owner of the building for the number of days and nights that the building was to be in use. The amount to be paid per each of the day was £100. The agreement further included the means and manner in which the building was to be used including the guidelines of using the building as well as the activities to be included in the concert and the services the plaintiff expected to find in the structure. The intention of the whole process is to verify whether music hall in the survey Gardens was in existence and fit enough to hold such a concert by fulfilling all the necessary requirements. The nature of entertainment activities agreed upon between the plaintiff and the defendant were thus necessary for the formation of the contract without which it would have been void. After all the necessary agreements but just before the start of the contracts or even before the first contract was held the structure was destroyed by fire. The damage was considered on the basis that neither the plaintiff nor the defendant was responsible for the fire and none of them had faulted according to the terms of the contract. As a consequence the concerts could not be staged as it had been agreed and thus the defendant was aggrieved. It was therefore necessary to determine whether the defendant owed the plaintiff the amount of the losses incurred as a result of failure of the concerts. It is clear in this case that at the time of forming the contract, both the defendant and the plaintiff had not considered the possibility of an accident and none of them anticipated that one could occur. Since they had not made any considerations for the same at the time of contracting, the case was thus left to be decided on the basis of general rules as applicable to contract formation (Ayres & Speidel 901). This is because the plaintiff and the defendant did not consider the occurrence of any unfortunate event. Though neither of them was a t fault, it was necessary to decide whether the plaintiff was viable for compensation. This implies that as a matter of fact there is a positive contract to act in certain manner which is necessary not true. Due to this issue of side show right at an early stage of the contract, it was evident that the performance of the concert was not possible. The performance of the contract agreements was possible if the incident did not occur and therefore the contract was positive and not unlawful. The contractor was supposed to carry out the contract or else pay for the damages incurred in case of a failure. As a result of the fire incident, the performance of the contract was rendered impossible or very difficult to perform. This rule in contract formation is applicable only when the type of contract formed is positive and obsolete and does not depend on any condition either expressed or implied. There are authorities that can establish that even at the beginning of formation of the contract the parties involved were aware that such an incident can occur and the contract obligations would not be fulfilled in the absence of a particular item. The contract would only be fulfilled if at the time of formation of the contract the item continued to exist. When the parties were forming the contract they must have contemplated that continued existent of certain items in the contract was necessary for the performance of the contract. In the absence of implied or express warranty hat the item may exist, the contract is not to be construed as a positive contract, but depends on the implied condition that both the plaintiff and the defendant must be exempted in this case. This is because before the breach, it has already become impracticable to fulfill the contract obligation as a result of in existence of the item and this is not the failure of the contractor. In the Taylor and Caldwell case the learned judge Blackburn has outlined all the features of the contract involved and the complexity of the case. In such a contract in which a clause that defines the action to tae in case an incident occurs like the destruction of the hall does not exist the condition becomes an implied condition. The music hall thus is an implied condition for the fulfillment of contract obligations and the contract terms do not stipulate the action to tae in case such an incident occurs. The destruction of the building was not the fault of the parties involved and such destruction rendered it impossible for the either party to fulfill their part of the contract. The music hall is necessary to the contract fulfillment and since it was destroyed against the wishes of either of the parties, they were thus exempted from playing their part in the contract (Ayres & Speidel 806). The parties can not perform actions that have been rendered impossible as a result of the destroyed building. Thus, Lord Blackburn ruled that the two parties were excused from meeting their contract obligations. This is because the contract could not be performed under the present conditions unlike the case of other contracts in which the performance solely depends on the individual themselves. Such include acts that can be done by the individuals themselves, e.g. promises to marry, or promises to serve for a certain time. These are never in practice viable an express of the death of the people involved. In such circumstances, the promise terms are violated if the person giving the promise dies before fulfilling it. In addition it was clearly indicated that if the performance of the contract is personal, the parties will not be held responsible. Thus,” says the learned author," if an author undertakes to compose a work, and dies before completing it, his executors are discharged from this contract: for the undertaking is merely personal in its nature, and, by the intervention of the contractor’s death, has become impossible to be performed.” In Hall v. Wright .Crompton J. in his judgment puts another case. “Where a contract depends upon personal skill, and the act of God renders it impossible, as, for instance, in the case of a painter employed to paint a picture that is struck blind, it may be that the performance might be excused.” From the two cases, it can be deduced that the only circumstance in which parties to a contract can be liable of the consequences of breach of a contract is only when an implied condition of the continued existence of the contractor or in the second case, the eyesight of the painter (Ayres & Speidel 750). The principle in these cases as deduced from the arguments is that in contracts where performance is dependent on continued existence on certain items of the contract or the contractor themselves; a condition is implied that the impracticability of the performance of the contract as a result of non-existence of the person or thing will excuse the parties from performance. In the cases above, there were no promises in words in the formation of the contract. The contracts were only positive and there were no stipulations that excused the performance in the course of any event or incident. The excuse is thus implied due to the nature of the contract and the basis of contract performance which depended on continued existence of certain items or persons. In our case, as per the analysis done, it can be deduced that the parties i.e. the defendant and the plaintiff formed the contract subject to continued existence of the particular major items, for example, the Hall, which was necessary for the performance of the contract. Thus, since the Music Hall having ceased to exist without the faulty of the two parties of the contract, they are both excused from the breach of the contract stipulations (Ayres & Speidel 810). The plaintiff is excused from using the ground and paying for it while the defendant is excused from meeting their promise of lending the hall and the grounds for use in staging the concerts. As a result the ruling was in favor of the defendant. Contractual liability generally takes place as soon as the parties of a contract form an agreement. Both the plaintiffs and defendants to a contract must fulfill their part of the bargain and the party that fails to meet their promise and fails to act as agreed is regarded to have committed a breach to the contract. The party that breaches the contract is liable to pay for the recovery of the damages incurred as a failure to meet their obligations to the contract. In the “Taylor v Caldwell” Justice Blackburn has ruled that neither party was liable for the breach of contract. He arrived at such a conclusion after considering the rule of complete liability set forth in Paradine V Jane. In Paradine v Jane the justices stated that even though in previous cases they would not allow a lesser to proceed against a lessee in time of war Jane was still liable for the rent. The court ruled that the parties had promised to pay the rent and if they were willing to offer conditions for the avoidance of liability in certain situations, they would have done so within the contract stipulation. In addition, the court ruled that if the lessee was to have the advantage of profiting from the use of the land, he should be liable for the losses which result in the course of using the land as well. This only applied to positive and definite contracts while overlooking those in which there was an express or implied condition in the formation of the contracts. Blackburn further added that the continued existence of the Music Hall in Surrey Gardens was an implied condition necessary for meeting the stipulations of the contract. The destruction of the principle building was not the fault or the wish of the parties involved though it rendered the performance of the contract impossible. The contractual agreements must be performed met by the parties involved. Any non-performance of the agreements in the contract will be considered as a breach to the contract and the parties involved will be held liable. In the case of Taylor v Caldwell the contradiction arises because it was held that in the case, if the contract performance was subject to the continued existence of an individual or thing, and that person or item ceases to exist, the parties were exempted from performance on the basis of impracticability (Farnsworth 740). If the nature of the contract in question is such that the parties to the contract must be aware at the time of forming the contract, that the contract stipulations would not be met unless some particular items continued to exist, then the contract is not positive and an implied condition to the effect that the parties would be exempted from performance if that item ceases to exist without their faulty is in place. However where a party provides an express or implied warranty that the principle item will continue to exist, the party is definitely liable for a breach of contract in case it ceases to exist. Where a positive contract to perform something is in place, the contractor must act in the agreed manner or else pay for the damages. In the event of unforeseen accidents or incidences, the performance of the contract is rendered impossible or unexpectedly difficult such a ruling will take effect. This rule is however applicable in cases where the contract is positive and absolute and doe not depend on any condition whether implied or expressed. When considering contracts that need the services of a specified person, the executors are not liable should the person dies or is not in a position to perform, even though the contract by its terms will have been broken. This is an example of objective impracticality it is impossible for either party to perform. If the parties in such an agreement do not consider the risk at the time of the contract the court will allow the loss to lie where it falls. In the example above, Taylor incurred a loss of the resources invested in organizing for the concert and Caldwell as well suffered due to the loss of the building (Farnsworth 740). This rule does not apply where the parties to a contract are at fault for the destruction of the principle items of the contract. In a simplified way, the matters or facts that can be taken into consideration include: (I) There was no point made in the contract that if the hall is not provided to the plaintiff on time then that would be case of claim for breach of contract (II) If there was a contract between plaintiff and defendant where the defendant was responsible for providing the Music Hall to the plaintiff on the specified days and in this case if the defendant fails to provide then this is definitely a legal breach. (III) Should there be a special rule or way to deal with cases in which the whole legal situation arises out of a natural disaster or an unnatural disaster but with no party having a responsibility in the destruction. 4. It is highly misleading to say that the compensation of the plaintiff is the goal of contractual remedies. Discuss. . The Definition of Compensation: Payments which are done to cater for the loss, damage or injury as a result of breach of a contract. When a person has committed a criminal offence that resulted to injury, loss or damage to another, the person may be required to compensate the injured person by a court compensation order. The court does this after reviewing the level of the injury suffered by the victim as a result of the action of the culprit. Megastars, courts may make orders in respect of compensation. Also, the court must take into account the offender's means and should avoid making excessively high orders or orders to be paid on long-term installments (Deakin &Markesinis 112.) ". Compensatory Damages The amount of that will be awarded for breach of contract depends on: The type of contract in question and which of the parties involved breached the contract. Special types of contracts: Sale of Goods. Construction Contracts. Employment contracts. Contractual remedies and remedial system Conceptualizations and categorizations are important for understanding and analysis of any situation, including legal ones. Concepts and categories form the basis of analyzing of any issue, including legal doctrines and judicial decisions. Once a certain classification forms the basis of our reasoning it can dominate our thinking and thus exclude us from seeing the entire, complex picture. For almost seventy years, the contract remedies has been subject to Lon Fuller and William Perdue’s classification of the interests safeguarded by monetary and other remedies to breach of contract. Anticipation, Reliance and Restitution have been the main subjects of consideration. In the recent pas, many scholars have extensively criticized this threefold classification. The critics mainly target the conceptual classification and the descriptive claim which the courts frequently award damages that are intended to safeguard the reliance interest(even if they do not declare that that is what they are doing);and also to the normative claim that the reliance interest is accorded more value of protection than the expected interest. Avery Katz pointed out that Fuller and Perdue’s tripartite classification is incomplete, and proposed to complete it by adding a fourth interest. Richard Craswell and Eric Andersen recommended to abandon Fuller and Perdue’s classification overall and substitute it with alternative ones. Irrespective all the criticism and new proposals, Fuller and Perdue’s analytical framework has maintained its authority in contract law doctrine and theory, and continues to offer us with a widespread vocabulary for discussing the goals of contract remedies. Fuller and Perdue’s imaginative conceptualization has clarified the complicated image of contract remedies, though has simultaneously blocked our view to some of the picture’s essentials. Thus, for instance, in Fast v. Southern Offshore Yachts, a buyer was awarded a specific performance of a seller’s obligation to provide the sale object, and as a supplementary monetary relief gained interest on 90% of the procurement price that he had already paid (Van Gerven. W. et al 300). Analyzing this monetary award, Edward Yorio claims that it “seems to violate the underlying principles of equitable accounting”, i.e. duplicating as almost as possible the condition that would exist but for the breach. Clayton Gillette and Steven Walt had a similar consideration in regard to Article 50 of the United Nations Convention on Contracts for the International Sale of Goods. According to this article the buyer has the option of lessening the contract price as a remedy for not conforming on the part of the goods. After critically analyzing this stipulation, they concluded that due to failure of the article to have a clear price reduction, the issue is contradicting. Ultimately, Dan Dobbs begins his comments on the basis that in such circumstances but not in others, the aggrieved party is entitled to recover refunds in excess of expectancy by labeling it “doubly strange”. Do these types of remedies really, “violate the underlying principles”, are they contradicting and strange? They are if one considers them in regard to the conventional classification. This is because they do not conform to the normal familiar interests, that is, the fourth interest identified by Katz). These remedies are less contradicting once comprehended in a fifth interest. The first aim of this Article is to demystify this bafflement by identifying other objectives of contract remedies, heretofore unnoticed; that is, reinstatement of the contractual equivalence (RCE) (Ayres & Speidel 31). In giving RCE remedies, courts and legislatures are not aimed at reinstating an injured party to the position they would be had the contract been performed as arranged. Instead of the courts and legislatures concentrating to reinstate the aggrieved party into the positions they would be had the contract been executed as planned without a breach or without any party breaching the contract, it should emphasize on sustaining the contractual equivalence in regard to agreed worth of performance. The chronological relation between their agreements should also be put into consideration. The rich hypothetical scholarship on the contract remedies does not restrain itself to defining and refining the interest, that is, principles and objectives, which form the basis of remedy rules like anticipation, reliance and restitution. It also analyzes and evaluates the various interests from the perspective of several aspects of normative theories, like economic efficiency, the will principle of the contract and corrective and distributive of justice. In addition to representations that courts and legislatures actually give RCE remedies in various cases. The article analyzes the normative justifications for RCE as a supplementary interest safeguarded by contract remedies. While this Article additionally explores the incompleteness of the conservative, tripartite categorization, in contrast to various contributions to this discipline of scholarship. It does not intend to undermine Fuller and Perdue’s analytical framework or refute its usefulness in analyzing contract remedies. It just disapproves the prevailing perception that the threefold categorization (or even the fourfold one proposed by Katz) exhausts the likely and valuable objectives of contract remedies (Ayres & Speidel 983). The plan of the Article is as follows. I- Present the perception of RCE against the backdrop of the conventional categorization of interests safeguarded by contract remedies. II- Is explanatory and analytical. It demonstrates how different existing doctrines of contract remedies, legal as well as legislative, are best comprehended as intended to reinstate the contractual equivalence rather than safe guard any of the familiar interests. This should be based on survey of the case law and legislative material in Part II. III- offers additional observations on RCE remedies, thus complementing its groundwork analytical presentation in Part I. IV- Is normative. It analyzes whether the award of RCE remedies adhere to some of the main foundational objectives of contract law, as reflected in contract law hypothesis. It first scrutinizes two deontological principles that focus on the relations between the aggrieved party and the party that breaches the contract: the will principle of contract (Section IV.B) and corrective justice (Section IV.C). It then shifts to consequentiality theories that emphasize on the effect of legal rules on society as a whole: distributive justice (Section IV.D) and economic efficiency (Section IV.E). The goals of contractual remedies There are many objectives for various types of contracts. In consideration to the general account of the regulations that control formation of contracts and loyalty in contract cases to make some essential points about the objectives of contract remedies. The principle objective of these regulations just like other contract remedies is vindicating contracting rights. When contract rights are considered or take place, it is either for one or several reasons. Rights at times provide ways to advance the objective of effective performance. This objective is familiarly articulated by the mitigation principle and in the American contract law, by the principle of efficient breach. Rights also provide a means of advancing the objective of remedial simplicity. In other words, the regulations that control the formation and loyalty to contract disputes, just like all other contract remedies, vindicate contract rights at the least expenses and with the least fuss. This should be completely unsurprising and more interesting are the exchanges made when these objectives conflict. A contract right’s assurance is of crucial importance. The definition of contract right is assured when the right to act according to the stipulation of the contract is undisputable. There is a significant difference between the right to a performance and the value of performance to the right party. In many instances the right to performance is assured while its worth to the right party is not. When a contract right is assured or indisputable contract allows a right-holder to undertake actions to protect themselves. Such actions may include exiting from the contract to prevent further suffering due to uncompensated losses irrespective of whether the actions may inflict disproportionate loss on the defaulter (Deakin &Markesinis 113.) In other words, the objective of vindicating rights trumps the aim of effective performance in reference to self-help actions that do not excessively tax courts. More bluntly, the principle of effective breach is bunk as a descriptive issue in reference to the regulations that control self-help actions to an indisputable default. The objective of effective performance propels other features of contract remedies. Simply, the mitigation principle and other regulations force a party to vindicate a right in the cheapest means possible. In addition, the objective of effective performance describes the law’s response to loyalty as far as contract uncertainty is concerned. This means that when a party acts in a manner that is disputable according to contract obligations or accepts performance that is not in accordance to the disputed obligation (or acceptance of performance of disputed adequacy) it does not preclude the later declaration of a claim of a lesser responsibility, but only if performance or acceptance of performance prevents a loss or damage. The point to note here is that the law is at times contradicting in reference to contracts. There is a scarce authority on the issue in question on whether contract uncertainty warrants preserving or refusing performance. This is as a result of the failure of the courts to handle the issue directly. The courts tended not to depend on traditional common laws and regulations which regarded contract rights and obligations certain or viable. This has changed as highlighted by the decision by Judge Poster that tackles the issue in question and the solutions that contract uncertainty does not guarantee exit. In fact the reasoning implies that uncertainty may require exit. Judge Posner is on to something much important. However, by considering the issue in a broader perspective, the issue of exit from uncertainty contract is cosseted by other regulations that discourage exit in case it would lead to more losses (Craswell & Schwartz 250). Contract meaning: A contract is aimed at formalizing an agreement between two or more parties, in reference to a specific subject. Contracts can cover wide ranges of issues which include the sale of goods or real property, employment agreements or independent contractor relationship, settlement of disputes and ownership of rational property developed being part of the main project for hire. One of the features of a contract is a mutual consent where the parties forming the contract have a mutual understanding on the contract details. There are many features that assist in the enforceability of any contract. The first one is (Good faith) it is inherent within all contracts that the parties are acting in good faith. The other one is (No Violation of Public Policy) where in order to be enforceable; a contract cannot violate "public policy". Another important feature is the (Oral Contract). The remedy’s types 1- Wasted confidence and restitution. Wasted reliance is an action intended to undo the agreements in a contract. Available if there has been: a. A material breach of contract. b. Fraud. c. Undue influence. d. Mistake. On the other hand, the restitution which can available when a- If there is returning of goods or property received from the other party to rescind a contract b- If the actual goods or property is not available, a cash equivalent must be made An example of such a case is Glendale Federal Bank FSB v US. 2- Equitable remedies. These types of remedies are offered if there has been a breach of contract that cannot be satisfactorily compensated by a legal remedy. They are also offered to prevent unjust enrichment. Moreover, this type has four types Specific Performance, Reformation, Quasi Contract, and Injunction. The case of Curtice Brothers v Catts is an example of such. 3- Cost to complete damages. This type can be seen in Peevyhouse v Garland Coal and Mining. Enforcement of Remedies If the breaching party refuses to pay the court ordered judgment, the court may issue:- a- Writ of Attachment. 1- Orders the sheriff to 1- Seize property in the possession of the breaching party that he or she owns. 2- To sell the property at auction to satisfy the judgment. c- Writ of Garnishment. 1- Orders that 2- Wages, bank accounts, or other property of the breaching party that is in the hands of third parties be paid over to the non-breaching party to satisfy the judgment. After all these discussions and the examples given we can say that it is highly misleading to say that the compensation of the plaintiff is the goal of contractual remedies. Works cited Ayres Ian & Speidel E. Richard. Studies of contract law. New York: Founding press, 2008 Ayres Ian, Speidel E. Richard & Murphy J.Edward. Studies in Contract Law (Teaching Notes) (University Casebook Series) [TEACHER'S EDITION] (Paperback). New York: Founding press, 2003 Ayres Ian & Klass Gregory. Insincere Promises: The Law of Misrepresented Intent. New York: Yale university press, 2005 Ayres Ian. Optional law: The structure of legal entitlements. Chicago: University Of Chicago Press, 2005 Craswell Richard & Schwartz Alan. Foundations of contract law. New York: Founding press, 2003 Deakin Johnston& Markesinis. Markesinis & Deakin's Tort Law. Oxford: Oxford University Press, 2008  Farnsworth E. Allan. Contracts. London: Aspen Publishers, Inc, 2004 Farnsworth E. Allan. Cases and materials on Contracts. London: Aspen Publishers, Inc, 2008 940 Hans Wehberg & Pacta Sunt Servanda, The American Journal of International Law, Vol. 53, No. 4 (Oct., 1959), p.775 Lunney Mark & Oliphant Ken. Tort Law - Texts, Cases 2nd Ed. Oxford University Press, 2003 Read More